Hog farmers shutting down

The president of Keystone Agricultural Producers says some hog farmers are shutting down because the markets are so bad.

Doug Chorney said weaners are “essentially worthless” in today’s market so his neighbour is sending all his hogs to market and by November his barn will be empty.

He said he expects other hog farmers will do the same thing because they simply can’t pay the bills.

Chorney was asked by reporters to comment after Manitoba’s chief veterinary officer ordered 1,300 weaners euthanized at a farm where they were discovered abandoned and in dire straits.

`The last thing farmers want to see is their livestock suffer, but it takes a real toll on the farmers to try to deal with this and sometimes people do things that they would never normally see themselves do,'' Chorney said.

``I can't emphasize enough the dire situation these farmers are in,'' he continued. ``The whole industry could be lost and it's a big driver of our province.''

Are your cows contented?

Only “contented cows” qualify for the beef buyers for Bon Appétit Management Co. of California.

The company, which has more than 500 cafés in 32 states of the United States, announced that after Sept. 1, it will only buy from beef, pork and chicken processors who get their livestock and birds from farms that have been certified by one of four animal welfare organizations – Humane Farm Animal Care, Animal Welfare Approved, Food Alliance or Global Animal Partnerships.

Last year the company bought 1.2 million pounds of ground beef and patties.

U.S. cuts chicken production

Sanderson Farms Inc.,  one of the biggest chicken companies in the U.S.,  is cutting planned production by two per cent.

That’s in addition to a four per cent cut implemented in January.

The reduction will leave its processing plants running six per cent below capacity.

Drought-driven increases in feed costs prompted the decision to begin reducing egg sets by two per cent on Aug. 6.

So far the Chicken Farmers of Canada, the national supply management agency,  has not changed its production plans for the balance of this year.

                           

Worse than 1998, Hurt warns hog farmers

Purdue University economist Chris Hurt says hog farmers are heading into “a tsunami of red ink” that is going to be worse than 1998.

The pain is coming from more hogs and expected, sharp culling of the sow herd and record-high feed costs.

He says losses between now and the end of the year could go as high as $60 per market hog; 1998 hit a loss of $45 per head.

Hog slaughter for the last two weeks increased by six per cent, far more than the one per cent increase market watchers anticipated. This pushed prices down by $10 per hundredweight.

Hurt predicts losses will continue during the first and second quarters of 2013 - $38 per head during the first quarter, $5 per head during the second.

Over the 12-month period, that began July 1, losses will average $33 per head and total $4 billion for the U.S. hog industry, Hurt says.

He predicts the sow herd will be reduced by four to six per cent by January and even that won’t help improve prices for market hogs until next summer.

The options: euthanize piglets and/or reduce market weights. Hurt said packers could help by reducing discounts for light-weight hogs.

He said the $170-million government purchase program will reduce losses by less than $1 per head.

                                    

Ritz mug-wumps on ethanol

Agriculture Minister Gerry Ritz is mug-wumping (sitting on the fence) on the ethanol issue.

Livestock and poultry producers know that drought has driven feed costs higher. Hog producers are in particular peril, already losing money on market hogs because feed prices have risen so high.

The livestock producers point to ethanol production as a key reason why prices have risen so high.

The main issue is ethanol requirements in the United States where nine per cent of gasoline needs to be ethanol this year. That will take at least 40 per cent of the corn harvest.

Canadian feed prices will track U.S. prices, pretty much regardless of whether we suspend our federal requirement for five per cent ethanol in gasoline.

But there’s another reason for Ritz to dither. The Canadian Renewable Fuels Association, which has strong backing from Ontario corn producers, claims ethanol is not responsible for rising food prices and claims that livestock producers get plenty of feed value from what’s left after producing ethanol.

Last week Rick Bergman, chairman of both the Canadian and Manitoba pork councils, said a task force would soon be announced to tackle the drought stress on hog producers.

But then he went on to point to high feed costs as the single reason why hog farmers are facing doom.

So if Ritz appoints a task force for the hog industry, he can fully expect it to highlight high feed costs as the main issue.

And we’re close to the time when all those hog barns that were emptied for three years to collect a federal subsidy will be eligible to come back into production. Nothing’s been said about that. Nothing at all.

So far Ritz hasn’t even persuaded his cabinet colleagues to enter the meat market to try to bolster pork prices. The United States is spending $170 million to buy meat and another $100 worth is being purchased in advance for the defense forces.

Surely Ritz could at least announce the purchase of some Canadian pork to feed all those extra prisoners the Harper government is holding in jails across the nation.

                           

Quebec report rakes supply management

Mario Dumais has written a report that says supply management has done little to help farmers, but is costing consumers about $3.9 billion a year.

The report for the Montreal Economic Institute says consumers lose because supply management ends competition among farmers to improve productivity which would, in turn, lower production costs and reduce food prices.

Farmers fail to benefit because they have to buy quota which is estimated to be worth $30 billion.

Dumais says he understands why farmers are reluctant to change, but said supply management ought to be gradually phased out.

``I think our farmers ... are very, very efficient, dynamic entrepreneurs and if we give them the possibility to develop their creativity and their entrepreneurship, we would be surprised to realize how they can internationally become competitive,” he said.

The report is one of the first from Quebec to dare to criticize supply management. The Quebec dairy industry is widely feared for its political clout.

U.S. defense buying $100 million of meat

The United States Defense Logistics Agency is making advance purchases of $100 million worth of meat to ease drought pressure on farmers.

There is no word of anything similar in Canada, but, then again, we don't have a leadership convention and federal election underway.

News about the Defense Agency purchasing is in addition to $170 million worth of government purchases, also to relieve drought pressures.

The defense agency last year bought 95 million pounds of beef, 68 million pounds of pork, 500,000 of lamb, 55 million of chicken and two million pounds of catfish.

The purchases will not change menus, said Tom Daley, deputy director.

Storing the frozen meat and catfish will cost about $3 million.

CNE posts pig-contact warning

Under guidance from the Canadian Food Inspection Agency, the Canadian National Exhibition has posted signs warning the public to avoid contact with pigs.

It’s not the first time the CFIA and CNE have posted warnings, but this time there have been no Canadian pigs identified with avian influenza and it appears the caution is related to cases in the United States.

The Centres for Disease Control says 276 human infections have been identified there, most of them young children who had contact with pigs at fall fairs.

It has also recently reported two cases of swine flu passing from person to person.

The CNE introduced biosecurity precautions prior to this year, including a pexiglass barrier to keep the public away from pigs. In that case, the concern was that diseases might spread from people to pigs.

Zehr does profit calculations

Ray Zehr of Shakespeare did an analysis of an article I wrote in the Aug. 14 issue of Ontario Farmer saying that farmers on average are only getting a return of  22 per cent.

"If 50 per cent of farmers are quota and 50 per cent are non-quota farmers, and quota farmers have a return of 50 to 60 per cent then non-quota farmers have a return of minus six per cent," Zehr writes.

"If you take into account that non-quota farmers manage expenses better, they are probably close to zero.

"The fact is if you exclude capital costs quota farmers have a return of 70 to 80 per cent.

"The fact is farmers are being robbed by people who know it’s all too easy to take money from farmers.

"Quota farmers have nothing to worry about. They know they will be the only ones left in 10 years and that thieves don’t care who they take money from.

"It’s up to governments to publish earnings of farm suppliers as a group and if necessary enforce ‘price freezing'," Zehr says.

Good blasts commission

Geri Kamenz

Lawyer Donald Good has written a blistering letter to Geri Kamenz, chairman of the Ontario Farm Products Marketing Commission, accusing the commission staff of helping the Egg Farmers of Ontario EFO) marketing board prepare a defence against the petition he filed on behalf of Svante Lind of Verified Eggs.

“To have allowed the General Manager (Harry Pelissero) and Counsel (Geoffrey Spurr) for EFO to work together with senior staff of the Commission to build the EFO defence creates a very significant conflict of interest.

“There are other emails which make it appear that Commission staff are working very closely with EFO to protect EFO's position against the allegations in the Petition, including one where Mr. Pelissero is pleased with your response,” Good has written to Kamenz.

The petition is one that Good filed in January, 2011, asking the commission to launch a public inquiry into the egg industry.

Lind has sued the egg board, L.H. Gray and Son Ltd. and Burnbrae Farms, accusing them of conspiracy to drive him out of the egg-grading business. He has, in fact, subsequently sold Best Choice Eggs.

Good notes in his letter that Kamenz led him to believe as recently as this August that the commission has yet to make a decision about launching the inquiry and/or investigations requested in his petition of January, 2011.

He notes that the recent release of documents through the Freedom of Information system reveals that the commission in fact decided in April of 2011 that it will not hold either a public inquiry or an investigation into allegations Norman Bourdeau filed with the commission.

Good also wrote that “EFO has an extreme bias in presenting and building its best defence to the allegations of wrongdoing and the Commission has not even asked the Petitioner (Lind) for its evidence to support the allegations.”

Kamenz has declined repeated requests from Good to meet with the commission to discuss the allegations and evidence.

                                   

Good wrapped up his letter to Kamenz, writing “the Farm Products Marketing Act is farmer protection legislation.

“I trust that as a former president of Ontario's premier farm organization (the Ontario Federation of Agriculture) representing the well being of farmers, farmer protection is still your major concern.”

Frankly, I can't see how the provincial government can allow Kamenz to continue.

Kamenz accused of misleading egg lawyer

Lawyer Don Good, acting for Svante Lind, owner of Verified Eggs and former owner of Best Choice Eggs, says Geri Kamenz, chairman of the Ontario Farm Products Marketing Commission, misled him about the status of Good’s request for an inquiry into the egg industry.

And Good also says Kamenz and commission staff consulted closely with the Egg Farmers of Ontario marketing board about the allegations of wrongdoing in the egg industry, but didn’t consult him or Lind for their comments on the issues.

The allegations, first outlined by Norman Bourdeau, who was information technology officer for L.H. Gray and Sons Ltd., include:

-     -  cheating on egg grading.

-     -  collusion among the marketing board, Gray and Burnbrae Farms Ltd. to make business difficult for Lind and his Best Choice Eggs.

-      - e-mail discussions between Gray and Burnbrae about reducing competition to maintain higher wholesale egg prices.

In early August, 2012, Good wrote to Kamenz seeking a meeting to discuss his request for an inquiry. Good said he is acting for Verified Eggs which has no lawsuits pending; that negates the commission's excuses that it won't investigate matters under litigation.

Kamenz declined the dates Good mentioned, saying the commission “continues to consider the request for an investigation."

Kamenz said the same thing to me.

In fact, however, according to minutes of a commission meeting more than 16 months earlier, on March 30, 2011, the commission approved a motion to “refuse the request to consider a public inquiry and decline at this time to investigate the specific allegations that are subject of the request.”

Kamenz wrote to Good in August that the commission would be considering the request for an investigation and/or public inquiry when it would meet in September.

Good says that in misleading him, Kamenz denied him the opportunity to file an appeal.

Good has made Premier Dalton McGuinty aware of the situation.

A large number of documents has been released to Bourdeau, who filed a Freedom-of-Information request, and they show that the commission and the egg board were in close and friendly contact many times over the egg-industry issues and the lawsuit Good filed against Gray, Burnbrae and the Egg Board on behalf of Lind and Best Choice Eggs.

In his August reply to Good’s request for a meeting, Kamenz wrote “Unfortunately, it will not be possible to set up a meeting those weeks. The Commission is not scheduled to meet again until the third week of September and I am not in a position to discuss the Commission's position untll after the Commission has had an opportunity to discuss the Petition at its September meeting.

‘The two letters, including your request for a meeting with the Commission, will be presented to the

Commission for consideration at its next scheduled meeting.

‘At the meeting, the Commission will also be asked to consider and provide further clarification of its position on the status of the request for investigation, so that this position can be provided in writing to you and your clients and Mr. Bourdeau, shortly after the Commission meeting.

‘Therefore it would not be appropriate to initiate any type of appeal at this time.”

It's that last sentence that is one of Good's current complaints about Kamenz.

In April, Kamenz wrote to Carolynn Griffith, then chair of the Egg Farmers of Ontario marketing board, asking the board to “develop written operational policies and procedures on specified matters for the commission’s consideration.”

He said these policies and procedures would take effect “going forward” once accepted by the commission.

The list of requests speaks to many of the points outlined in the allegations and request for a public inquiry, such as how the egg board deals with rumours of cheating on egg grading, how it deals with applications to the Department of Foreign Affairs and International Trade for permission to import eggs, how it seeks eggs to fill those markets, how it responds to complaints and how it polices the collection of levies and licence fees.

The documents released to Bourdeau also indicate that the commission contacted the Canadian Food Inspection Agency about the allegations of cheating on egg grading.

Dr. Brian Evans, chief food safety and veterinary officer, replied that the matter was under investigation, but the release of information to the commission would be subject to limits under the Privacy Act.

The correspondence also indicates that the Canadian Food Inspection Agency and Health Canada undertook a survey to determine the incidence of cracked eggs and that Health Canada undertook a review of its food safety standards regarding cracked eggs.

That survey was to be completed by the end of April, 2011. 

There are documents indicating that the commission briefed the agriculture minister about how many egg producers are in her riding and recommended she make no comment on the allegations pending the outcome Lind’s lawsuit and lawsuits Gray filed against Bourdeau.

Gray’s lawyer, Alison Webster, wrote the commission saying Gray believes “the (egg-grading) information (in Bourdeau's allegations) has been manipulated such that it is unreliable and entirely without foundation.”

She did not provide any documentation to back that opinion. 

Bourdeau cited thousands of electronic egg-grading documents to back his allegation of cheating on egg grading.

Egg firms' defences

In the midst of a treasure trove of documents released through a Freedom of Information application are the defences filed in court by L.H. Gray and Son Ltd., Burnbrae Farms Ltd., John Klei and the Egg Farmers of Ontario marketing board.

In a nutshell, they deny every allegation levelled by Svante Lind and his Best Choice Eggs Ltd. about conspiracy to drive him out of the egg-grading business, about collusion in the wholesale marketplace, about cheating on egg grading.

The egg board has filed a counter-claim against Lind for $131,000 worth of levies it now claims Best Choice Eggs owes for eggs marketed through a depot in Huron County. That counter-claim was filed in February.

It is also claiming that Lind's Verified Egg business has no traceability credibility to back its claims for eggs marketed as brown free-run Omega 3 eggs. It says not all of the producers bought their feed at a company making Omega-3-enriched rations.

John Klei, in his defence, says he never met with Burnbrae or Gray after he left Best Choice Eggs.

He is accused of providing inside information about Best Choice's operations.

Burnbrae details its defence point by point, including denials that it colluded with Gray on wholesale marketing, says it did not provide any cracked or dirty eggs to Best Choice and says if they were, indeed, cracked and dirty, it must have happened during unloading at Best Choice facilities. 

Best Choice has inspection records from the Canadian Food Inspection Agency which found serious fault with the eggs Gray and Burnbrae shipped to Best Choice. The CFIA ordered the eggs held off the market.

Burnbrae and Gray provided Best Choice with eggs in response to Best Choice's application for permission to import from the U.S. on the basis that there were no suitable eggs in Ontario; the egg board has an opportunity to find eggs to fill those orders, and found eggs for Best Choice from Burnbrae and Gray.

Gray also denies any wrongdoing, says it never had any improper relations with the egg board, never did collude with the egg board and Burnbrae against Best Choice, never cheated on egg grading and says Norman Bourdeau stole more than one million documents from the company to share them with Lind and level his allegations of cheating, collusion, etc.

Gray denies ever telling Bourdeau, when he was the company's information technology employee, to destroy any documents.

However, in a counter-claim, Donald Good, lawyer for Lind, points out that there is an e-mail from Scott Brookshaw, an employee of L.H. Gray and Son Ltd., saying all eggs except "shitballs and leakers" can go into the pack of Grade A eggs.

All of the claims and counter-claims have yet to be tested in court.

It will be months before a trial because the lawyers are still sparring over preliminary issues, such as Gray's motion to hold a separate trial first on the allegation of cheating on grading, and a decision on how many of the electronic files taken by Bourdeau can be used in the lawsuit.

Farmers responsible for food safety

Dr. Doug Powell, who has made a career in food-safety communications, says “producers of any food need to own their food safety.

“Don’t ask government to do it, don’t ask consumers to do it: take care of things on your own end and good things will follow.”

He offers the advice leading into a website article about food poisoning traced to melons.

He notes that in Rocky Ford, Colorado, it’s only after a devastating outbreak of food poisonings that ended with at least 35 people dead that producers have hired a food safety manager to monitor melon picking and to change worker pay to hourly rates instead of melons picked.

They have also built a central packing shed where melons are washed with soap and a chlorine oxide, then rinsed with well water tested for contamination.

After being washed, the melons are cooled to reduce condensation and then packed into boxes labeled with codes traceable to the fields where the melons were grown. 

The boxes are packed with slips that interested shoppers can scan using a smartphone to read about where their melons originated.

“These are on-farm food safety basics that should have been undertaken years ago. There have been plenty of previous outbreaks,” writes Powell on his Barfblog website.

This year there have been food poisonings traced to melons from Indiana and North Carolina where inspectors found the melon field was a dump that had not been checked out. The bacteria identified there is Listeria.

In Indiana it’s salmonella and two people have died and at least 141 have been sickened.

Supermarket wants spies on farms

Coles supermarket chain in Australia says it wants video cameras in farms to assure customers that animals are getting humane treatment.

Tesco supermarket chain in the United Kingdom has cameras in lamb abattoirs to ensure they are adhering to food safety standards.

Australian Farm Institute director Mick Keogh said the Coles proposal lacked context, and appeared to be a cynical appeal to well-heeled consumers.

And he accused Coles of having a double standard, making no similar demands for cheaper frozen vegetables and processed foods imported from other countries.

"It's the sheer hypocrisy of it . . . They just keep on importing bacon from overseas and pretending it is Australian," said hog farmer John Bourke.

Seguin critiques Risk Management Program

It’s hard to know what taxpayers got in return for $100 million spent on the risk management programs Ontario introduced for livestock and horticulture producers last year, according to Bob Seguin, executive director for the George Morris Centre think tank at Guelph.

Seguin, who used to be chief policy advisor for the Ontario Ministry of Agriculture, Food and Rural Affairs and, as such, involved in decades of federal-provincial-producer negotiations over subsidies, says most of the money from this new program went to the large-scale producers.

But they were not asked what they did with the money, so it’s hard to judge the public benefits, such as whether the farmers invested in improving efficiency, quality or productivity.

He might have added that the Liberals don't even know whether it bought them any votes. It was, in short, a massive pig in a poke.

Things are even more uncertain this year because farmers now have to pay premiums to remain enrolled in the programs and the spring provincial budget announced that there will be a cap on how much the government is prepared to spend.

What that means for individual farmers remains an open question.

There is a cap on how much an individual farm can collect from the program, but it’s relatively high so last year only three per cent of the province’s livestock producers got 45 per cent of the money and 18 per cent of the horticulture producers enrolled in the Self-Directed Risk Management Program got 70 per cent of the money.

At the other end of the scale, 56 per cent of the livestock producers got $5,000 or less out of the program, and their take was only 6.2 per cent of the total.

Seguin says that because the province is capping what it will spend this year, it’s unlikely that hog and beef cattle producers will get enough to cover their costs of production. That was an important objective farmers set for the program in their negotiations with the government.

Nor is it likely that the federal government will put any money into this program. The usual split is 60 per cent from the federal government and 40 per cent from the provinces.

In 2008, they signed on to the national Growing Forward program which brought some semblance of a level playing field across Canada. That program is now under negotiation for the next five years; the federal government is talking about reducing what it will put into farm subsidies.

Last year was highly profitable for Ontario farmers – net income of $1.32 billion, which was well above the level for the previous several years.

Seguin says “with Ontario’s 2011 net farm income above most recent years, it is an open question whether the program payments by the RMP in 2011 had significant impact on overall farm sector prosperity and outlook.

“The price increases for grains and oilseeds in particular would account for some of the net income gains in 2011.”

He says “the additional government payments of almost $100 million overall to this 2011 initiative would have been of some assistance but could not have been the major income boost for the sector-as may have been anticipated in earlier years of program discussion.”

The net subsidies for Ontario farmers last year – counting  both federal and provincial contributions – totalled $231 million.

Seguin says “unless the program design changes considerably to directly or even indirectly address policy linkages and impacts upon other agri-food policy priorities - environment, food safety,

innovation, market development, investment - it will be extremely difficult to determine appropriate impacts or benefits resulting from the RMP beyond 2012 on these other priorities.

“Even if formal cross compliance were suggested, how to best measure, analyze, oversee, and make accountable the cross compliance will be a serious challenge to undertake.”

Cross compliance would, however, give taxpayers some comfort in knowing they got something for their money.

He says “the effectiveness and long term benefit” of linking payouts to the cost of production  “is still to be determined.”

One of the risks is that the United States may take trade action, applying duties to Canadian products to offset the benefits of the Risk Management Programs, he says. That’s the main reason Agriculture Minister Gerry Ritz cites for refusing to put federal money into the programs.

In his conclusions, Seguin says “finally, without more detailed analysis of the impacts of the payments on individual producers and by commodity, and greater transparency in the program design and payments, it is very difficult to determine the overall net benefit/cost of the RMP or indeed, any of the national business risk management programs on the individual participants, the specific commodity industry, or on the entire agri-food sector.”